I am a CPA in Texas with an MBA from the University of Chicago. I have seen a lot and made many mistakes. Hopefully by now I will have learned something from them. Just as importantly, you may learn something from my mistakes. You can e-mail me by clicking on my "View my complete profile".

Tuesday, March 10, 2009

California Death Watch-2

"If you thought Washington's stimulus debate was depressing, take a look at the long-running budget spectacle in Califorina. The Golden State's deficit has reached $42 billion. Governor Arnold Schwarzenegger is threatening to furlough 20,000 state workers (Go ahead, make our day), and as we went to press yesterday, Democrats who control the legislature had blocked lawmakers from leaving until they finally get a deal. ... Roughly 1.4 million more nonimmigrant Americans have left California than entered over the last decade according to the American Legislative Exchange Council. ... The tragedy of this gamesmanship is that the political class still won't address the root cause of its financial problems, which is that the state is becoming less economically competitive. California businesses and high-income families already pay a surtax for locating inside the state. The new budget deal raises that tax toll higher still", my emphasis, Editorial at the WSJ, 18 February 2009.

"Middle-class, tax-paying Americans are fleeing, and millions upon millions of impoverished, uneducated, non-English speaking migrants from rural Latin America and beyond have taken up residence in California. According to Census Bureau numbers, while roughly 168,000 Americans flee the state each year, almost 250,000 legal and illegal immigrants move to California", Scott Pomerantz (SP) letter to the WSJ, 25 February 2009.

Amazing. The WSJ still didn't figure out why California is becoming less competitive. Hint: why did "1.4 million more nonimmigrant Americans" leave than enter California in the last 10 years? The open borders WSJ will never figure it out. The WSJ believes importing "cheap" labor is good for the US "economy", whatever that is. Look at California and see if you agree with the WSJ.

The crush for jobs is going to create frictions that no one has imagined. I can think of plenty of folks who would like the day labor or cleaning or lawn work taken by illegals.

Whether or not illegals take welfare can be irrelevant if the work they have cuts away from those that end up on welfare.

There will be an overwhelming effort to expunge illegals from the US and it will not be pretty.

By the way illegals hurt the US and CA in particular in some perverse ways. One thing that Asian investors often do is buy a place and send grandma/grandpa over to occupy the place, collecting a tax break -- homestead exemption. Then they put grandma/grandpa on social security.

Good deal, the US government pays for the cash flow of the housing investor who also drives up the cost of housing.